Study on Loan Pricing Mode and Its Application of Domestic Commercial Bank during the Process of Interest Rate of Liberalization
|School||Nanjing Agricultural College|
|Keywords||Commercial Bank Loan Pricing Mode Interest Rate Liberalization|
Credit loan is the core business and also the major profit source of commercial banks. Accordingly loan pricing is the key factor for assuring the realization of profit.Due to the long-term control of interest rate, most domestic commercial banks lack of practical experience and crucial data accumulation for pricing loans, and are also weak in loan pricing management and single at pricing method. Recently financial liberalization is getting closer and interest rate liberalization is going steadily, as a result the control of domestic commercial banks get weak gradually. Based on loan pricing theory of western developed countries, domestic scholars have already done a lot of researches for loan pricing. However, limited by internal and external environment and inadequate technical support, the mode of loan pricing is still rough. Besides, the principle of risk-cost and competition-efficiency cannot be fully realized. How to select proper pricing method for loans becomes an important issue for commercial banks, in order to keep profit at a certain level meanwhile satisfy the need of clients and maintain the competitive status of commercial banks.According to the theoretical and practical way, this paper concludes different modes of loan pricing of modern commercial banks, and analyzes the applicability of these modes for commercial banks. Based on the previous conclusion and analysis, this paper offers a common mode which is suit for loan pricing of domestic commercial banks through analyzing the influencing factors on loan pricing of domestic commercial banks. Based on cost addictive method, this mode makes some adjustments by combining with comprehensive contribution of clients and market competition. After introducing this common mode, this paper uses a case to give an empirical analysis on the mode.This paper offers some advice to improve the system of loan pricing of commercial banks which are to establish systems for measuring capital cost, tracking marketing money, managing credit risk, cost and clients and to improve the incentive mechanism and also point out some practical issues which need to be mentioned in loan pricing, during the process of interest rate liberalization.